SLPA’s response to Galhena’s response

This is in response to the article titled ‘Galhena responds to SLPA on East Container Terminal Bid’ published in the Daily FT on 3 August. This dialogue concerns a project of national importance.

Arm chair critiques have all the time in the world to engage themselves freely in smearing campaigns while professionals at work cannot while away replying them. They have to shoulder the task of nation building.

SLPA chose to ignore some criticism as it is busy working on a multitude of projects to elevate Sri Lanka as the Shipping Hub of the region. However when criticism happens to be destructive aimed at discouraging the investors from investing in Sri Lanka, we have no choice but to respond.

The reply to SLPA’s response adequately proves the writer’s depth of knowledge on the subject. Galhena has failed to see the name of the writer clearly indicated above the heading of the article in the printed edition. He imagines himself to be up against 9,500 strong work force of SLPA who are busy running five ports including a world class hub port. Only one out of the 9,500 decided to reply you. The writer is Premachandra, the Managing Director of SLPA. 

Galhena is welcome to visit the port and educate himself as to what the 9,500 people of SLPA are up to. They man and run five ports, not a single terminal. Many who compare the workforce of SLPA with that of a single container terminal conveniently choose to ignore the fact.

His conclusion shows he had in fact not understood the context of the reply. Singapore and Colombo were compared in the context of providing capacity for all sizes and types of ships and continuing to operate all classes of berths including the oldest. The length of quays and the number of berths are immaterial in this respect.

Galhena in his wisdom uses a single criterion to determine if a terminal is a world class facility or not. He compares SAGT and JCT in respect of availability of professionals in respective terminals. A person who has not worked in a shipping line or a port for decades considers himself capable of judging the level of professionalism of others who are well qualified and experienced in that field. This happens when one relies only on book knowledge with zero experience. 

JCT has berths that can accommodate any ship from 100 TEU to 13000 TEU capacity. Therefore, it is a world class Terminal catering to the majority of ships in business. For his information only 13% of the world container fleet are beyond this capacity. The day the feeder fleet includes 13000 TEU ships we will have no choice but to call JCT a feeder Terminal. Be that as it may, is it a shame to be termed a feeder Terminal? Isn’t a feeder a very important indispensable player in hub business? My dear Galhena, do you know that in relay services all classes of ships play a role as feeders?

He has given utterly incorrect data on quay lengths and the numbers of employees.  JCT compared to other terminals has not outsourced many activities as SLPA has a workforce that can provide all the services needed.

As for JCT losing volumes, the writer should educate himself on statistics. Until last February, SAGT too steadily lost volumes to CICT. Was it due to lack of professionals in SAGT? Galhena in his cannot make sense even when facts are very clear to others. JCT was the first deep water facility created 31 years ago in Port of Colombo. It has served for three decades to stabilise this port as a hub. True, it has single lift cranes procured in 1985/95 while other terminals have twin lifters acquired recently. 

True it has two berths with low draft as deepening them is not practical in view of the other structures such as Island breakwater quay walls of Bandaranayaka quay and Colombo Dock Yard which have shallow foundations. True, JCT has only 630 metres of linear – 15 metre deep water quay compared to 940 metres of linear deep water quay at SAGT. Is it the fault of the professionals of SLPA that the competitors created and partnered by SLPA have advantages in terms of handling capacity?  

For his information SLPA has planned to upgrade JCT immediately after completion of ECT with a view to extend its deep water berths and provide higher capacity equipment. Please do not dream of death knells. Our five year plan includes upgrading JCT to the next level. We at SLPA are proud as partners of SAGT and CICT. They are joint ventures with SLPA and SLPA and its professionals run a world class hub port named Colombo where they are located.

ECT bidding 

As admitted by the writer he has little knowledge. That is dangerous!

Galhena credits himself for pointing out the need for ECT last week. Congratulations for belated realisation! For his information SLPA professionals saw it in 2012 and they developed and completed all the civil works of ECT phase 1 by end of 2015 well before CICT reached 60% utilisation level. Difference between dreamers and professionals is that dreamers see reality after the event. 

If the Government permitted SLPA to procure equipment as it planned, the terminal would be operational in 2017. However the Terminal will be up and running well in time as the current terminals as he rightly says ‘with minor adjustments’ can increase their capacity to meet the demand and the Terminal operators are well equipped with that knowledge. Perhaps Galhena may use his professional knowledge to publish an article to educate those who are in the business on how to manage Terminals if he chooses to do so.

ADB Assistance

ADB has been appointed as the transaction advisor to SLPA and it plays no role in determining the final winner. That would be the task of the Cabinet Appointed Negotiating Committee (CANC) which would advise the Cabinet of Ministers who will finally decide on it. SLPA’s professionals have been appointed to the Technical Evaluation Committee to advise the CANC.  The parties who are in contact with SLPA actively participating in the bidding process are well aware of this fact. 

For the information of those who love this country, ADB provided the loan for breakwater building. ADB is also in the process of assisting SLPA and the Government in carrying out the National Port Master Plan study and the Individual Port Master Plans for all ports for which they have pledged $ 1.5 million grant followed by a Technical Assistance loan package to carry out the detailed engineering studies on individually identified projects. We at SLPA and the Government are busy building ports and not selling toys or games.

ADB’s involvement in the ECT project has given a tremendous strength to the project making it more bankable and transparent.

Sinister/Hidden hand

Yes. We see a sinister/hidden hand in the continuous barrage of damaging baseless criticism aimed at ECT project with a view to create doubts in the minds of the potential bidders. However, the bidders are entities and persons who have experience in similar processes and they are in constant touch with the CANC with regard to the process. Can Galhena claim a day of experience in working in a global port or a terminal in any capacity before self-appointing himself as an advisor to the port professionals who have proven track records? 

For the benefit of those who are genuinely concerned about ECT project in particular and the Ports in general let me explain why the closing date has been extended.

The original Expression of Interest (EOI) had some clauses that were ambiguous and the bidders during the time given for clarifications and at the pre-bid meeting indicated their views on them. The CANC and SLPA revised some of the clauses accordingly and it was quite natural that the closing date had to be extended in view of these changes. On the other hand the bid requires particular partners with diverse qualifications. In order for the bidding consortiums to organise themselves with the right parties many requested additional time too.

These were the reasons behind the extension. Writer of this article who has worked with the terminal companies of the world’s third largest shipping line on many PPP projects around the world has experienced this in many similar projects and it is quite natural for port operators to extend the closing dates subsequent to pre-bid discussions and clarifications.

As for geo politics the writer may be playing them with a view to help a competitor of Colombo.

Galhena has chosen to close his correspondence on the matter with his last attack. Thank you.

Please be careful when you sip your morning tea! There might be an alligator hiding in your tea cup!

H.D.A.S. Premachandra

Managing Director, Sri Lanka Ports Authority